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The Scotts MiracleGro Company Commmon Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2012 09:33PM
The Scotts MiracleGro Company Commmon (SMG) filed Quarterly Report for the period ended 2012-06-30. Scotts Miracle-gro Co has a market cap of $2.49 billion; its shares were traded at around $41.39 with a P/E ratio of 16.8 and P/S ratio of 0.9. The dividend yield of Scotts Miracle-gro Co stocks is 3%. Scotts Miracle-gro Co had an annual average earning growth of 4.6% over the past 10 years.
Highlight of Business Operations:Net sales for the three months ended June 30, 2012, were $1.062 billion, an increase of 0.3% from net sales of $1.059 billion for the three months ended July 2, 2011. Net sales for the nine months ended June 30, 2012, were $2.447 billion, an increase of 1.2% from net sales of $2.419 billion for the nine months ended July 2, 2011. The change in net sales was attributable to the following:
Global Consumer segment net sales were $960.7 million in the third quarter of fiscal 2012, an increase of 1.0% from the third quarter of fiscal 2011, and were $2.23 billion for the first nine months of fiscal 2012, which is roughly flat as compared to the same period of fiscal 2011. For the three months ended June 30, 2012, increases in volume impacted net sales by 2.3%, offset by unfavorable foreign exchange rates and pricing of 1.2% and 0.1%, respectively. For the nine months ended June 30, 2012, volume and pricing favorably impacted net sales by 0.4% and 0.6%, respectively, offset by unfavorable foreign exchange rates of 0.8%.
Net sales in the United States increased $43.1 million, or 5.7%, and $33.0 million, or 1.8%, for the third quarter and first nine months of fiscal 2012, respectively, as compared to the same periods in fiscal 2011. The increase in United States net sales for the third quarter and first nine months in fiscal 2012 was driven by an increase in pricing on a year-to-date basis, higher sales of our controls and mulch products, and the national launch of our new Scotts Snap® spreader system, partially offset by declines
Scotts LawnService® net sales increased by $5.4 million, or 6.6%, and $9.1 million, or 6.0%, in the third quarter and first nine months of fiscal 2012, respectively, as compared to the same periods of fiscal 2011. The increase in net sales was driven by a 7% increase in customer count, primarily due to increased consumer demand as well as the impact of prior year acquisitions.
On September 21, 2011, we entered into a new Master Accounts Receivable Purchase Agreement (the “MARP Agreement”), with an initial stated termination date of September 21, 2012, or such later date as may be mutually agreed by us and the banks party thereto. The MARP Agreement, which is uncommitted, provides for the discretionary sale by us, and the discretionary purchase by the banks, on a revolving basis, of accounts receivable generated by sales to two specified account debtors in an aggregate amount not to exceed $325 million, with debtor sublimits ranging from $120 million to $250 million. Under the terms of the MARP Agreement, the banks have the opportunity to purchase those accounts receivable offered by us at a discount (from the agreed base value thereof) effectively equal to the greater of 7-day or 3-month LIBOR plus 1.05%. The MARP Agreement replaced our previous Master Accounts Receivable Purchase Agreement, which provided for the discounted sale, on an uncommitted, revolving basis, of accounts receivable generated by a single specified account debtor, with aggregate limits not to exceed $80 million and an interest rate that approximated the 7-day LIBOR rate plus 1.25%.
Stocks Discussed: SMG,